Customer value management, a great ‘idea’

Imagine a hypercompetitive environment: the challenges of extremely high churn; significantly low revenue per customer; low entry and exit barriers for customers; the most expensive spectrum acquisition bids in the world; and stringent regulations. All this coupled with the opportunity of tapping into the world’s second-largest market.

Welcome to the Indian telecom industry. With product differentiations and price advantages diminishing, the telecom operators that can keep customers engaged throughout their life cycles will be the successful ones in the long run.

Idea Cellular uses big data analytics to help acquire profitable customers, retain them, up-sell and cross-sell, and engage them in meaningful interactions. Today the company harnesses a massive amount of data, which is generated from its customer base of more than 150 million subscribers serviced by more than 110,000 telecom towers. Idea Cellular sees nearly 1 billion transactions per day, which results in 65TB of data per month.

“Data is transforming the world around us,” says Prakash Paranjape, CIO of Idea Cellular. “At Idea, we believe in transforming data into insights and foresights, which empowers us to better engage our subscribers and drive breakthrough business outcomes.”

With customized and event-driven marketing, Idea Cellular has achieved $100 million in incremental revenue, with more than 30 percent margin.

Staying competitive in a tough environment

There are more than 10 telecom carriers in India, with seven national carriers offering service in each region. Idea Cellular is specifically focused on the rural market where margins are thin and the challenges are enormous. There is no universal way to market to the rural areas, as they vary widely in geography, language and cultural traditions.

Idea Cellular focused on a micromarketing strategy with highly customized messages. The problem the company faced was that of efficiently managing all these different messages and optimizing them. It needed to analyze and segment the customer base with 1,400 different variables that included 22 different geographies.

Using high-performance analytics, we can break down our data to get an accurate view of the market – and we can do it in minutes.

Ambrish Jain
Deputy Managing Director

“To provide the best value to customers, it is essential to microsegment customers and communicate highly targeted offers,” explains Ambrish Jain, Deputy Managing Director of Idea Cellular. “In a scenario where there are over 150 million customers, segmenting them into 10-15 segments will not suffice. With the power of analytics, we at Idea identified around 1,400 variables, and interaction effects of these variables have led to the creation of thousands of microsegments of the size of 50,000 to 100,000. This helps us better understand customer preferences and measure the campaign impact in near-real time.”

“SAS® campaign and predictive analytics solutions play a major role in analyzing consumer behavior, and they help us predict and strategize the kind of promotions that we would like to offer our consumers,” adds Sashi Shankar, CMO of Idea Cellular.

Ramping up its analytic firepower

“Today, the company runs more than 1,000 campaigns every day, right from the campaign base refresh, applying prioritization logic and interfacing with communication channels,” says Jain. “There are microsegment-specific scores generated every night in support of the program. Additionally, campaign performance monitoring is managed for about 5,000 live campaigns on any given day.”

Idea Cellular uses the SAS Marketing Automation framework – which encompasses data management, predictive analytics, campaign management and campaign performance monitoring – not only to deal with the volume of data that needs to be sifted through, but also to configure business rules and seamless integration with other operational systems.

The solution handles customer preferences involving language and channel (text, email, voice message), and applies channel capacity and communication policy constraints while also managing real-time product information exchanges between the provisioning systems. It also analyzes ROI for each campaign, so business users can determine what works and what doesn’t.

“Using high-performance analytics, we can break down our data to get an accurate view of the market – and we can do it in minutes,” says Jain. “This gives us the ability to run efficient and effective campaigns.”

Challenge

Maintain customers and grow revenue per user in the highly competitive cellphone market.

Solution

Benefits

The company achieved $100 million in incremental revenue after automating and optimizing its marketing communications.

The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.